7/24/2012 3:06 PM ET|
What college will cost in 18 years
The latest projections could give even the wealthiest parents pause. Experts and parents are looking for solutions.
It's not just the nation heading for a fiscal cliff.
Soaring education costs could end up rupturing your nest egg -- and bring your child to the brink of bankruptcy before he even gets his first job.
Even the top 1% may get a panic attack from the latest projected tuition rates.
Campus Consultants Founder and President Kal Chany figured out what college will likely cost by 2030 based on inflation rates. He wrote the book, "Paying for College Without Going Broke."
The findings? In 18 years, the average sticker price for a private university could be as much as $130,428 a year (see chart below). The situation isn't much better if you go the public route. Sending your child to a state university could set you back at least $41,228 a year.
Seuk Kim, who works in public relations in the Washington, D.C., area and is in his 30s, knows what he's up against. He has three kids under the age of 3.
"I am very concerned. I make a decent living to provide for my family, but we are a one-income household," said Kim. "We will likely have to rely on some financial aid or hope they can qualify for a scholarship. I would hate for them to have to take out a huge loan in order to pay for their education like I did."
He calculates he'd have to save about $3,300 per month if he sends his children to the University of Virginia located near his home. It's a figure Kim says he can't afford.
Kim adds, "The kids are the greatest thing that's ever happened to me, but they are one of the worst things that happened to my retirement plan . . . . Now that I've experienced a double whammy of the bear market and having to split my savings up four ways, I'm not sure I'll ever be able to retire."
Projected tuition costs, Fall 2029-Spring 2030*
|School type||5% increases||6% increases||7% increases|
|4-year public (out of state)||$71,373||$84,651||$100,239|
|4-year private (nonprofit)||$92,869||$110,146||$130,428|
|4-year public in-state||$41,228||$48,898||$57,609|
|Source: Campus Consultants Inc.; * Includes room and board|
Chany believes there's a good chance that his calculations will become a reality.
There may be a saving grace. As fewer Americans can afford to pay the steep prices, universities will become more open to negotiating.
"The colleges may just discount more and increase the aid budget. It's funny money. They want to attract kids who can raise the academic profile of the school. You get them in by letting them pay below the academic full price," said Chany.
- Calculator: How much should you save for college?
He's also watching what public universities charge out-of-state residents. They'll charge out-of-state students much more to keep the rates down for in-state students, according to Chany.
Greenberg Educational Group Director Eric Greenberg counsels families on the college application process. He finds college tuition has been increasing at double the rate of inflation. It's a situation putting many families in a financial Bermuda triangle.
"You would be amazed at the number of people who have such a small amount saved," said Greenberg.
That's a path Irina Borovsky, an information technology worker in the New York City area, isn't taking.
Borovsky, who has a 7-month-old son, puts away a few hundred dollars from every paycheck. Both Borovsky and her partner plan to contribute larger sums of money as the youngster gets older.
"It's important that my child goes to a good school. I do not believe, however, that going to a high-ranking private school is absolutely necessary, thus would most likely not take 'whatever is necessary' measures," said Borovsky. "However, this may change in the future."
More from CNBC.com:
VIDEO ON MSN MONEY
If college prices truly do get this expensive I will just buy my child a house instead of paying for her education and then she should be alright with an associates from a junior college or doing something else on the lower end of the payscale.
Well speaking from experience to someone's comment about financial assis..and scholarships being open to everyone...perhaps so. but they cherry pick who gets and who doesnt. my son..had excellent grades all through high school. the college he went to came looking for him. we couldnt get financial assistance...we made 'too much money'...they did give him 1000.00 after i put up a stink...and the kicker....they gave one of his high school classmates...17,000.00 to go to the school..who was a hispanic, here illegally and never even heard of this university until my son mentioned to him where he was going. so his classmate looked up the school, applied and was given 17 grand. we've had to pay 4 years of out of pocket amounting to 160,000.00. we applied for every possiblity of assistance known to man. we make a decent living, but to say we make 'too much money"...dont think so. and the sad part...the kid who got the money didnt go to the school but chose another with a better offer of $$. that's ok...my son proved himself well in college...while the other kid has gone nowhere fast on uncle sams money. not complaing..not making this any sort of a racial discrimination...just saying. id feel somewhat better if that money was offered to an american citizen of a lower income status, instead of someone who doesnt belong here. but go to the hospitals and see whats given free without question and to whom, while you can sit there and die while trying to pull a legitimate health insurance card out of your wallet. make what you want out of my comment but thats the beauty of being an american, even if washington isnt looking out for anyone. Freedom of speech and freedom of opinion. including yours.
No need to worry, if you can't make it to college, you can always go into the skilled trades.
Of course, you'll actually have to physically work for a living, usually in the elements, (heat/cold) and for the most part, you'll be dirty/tired come quitting time. I make about 70k a year, consistently.
Suits and ties are not optional... every day IS casual friday.
With the coming economic collapse, continued rampant government spending, and the distractive news from the real important cover-ups and news. I don't think it's even possible to guess how much college will cost in 2030. With quickly growing worldwide food shortages, ecological disasters, HAARP, unemployment, and war, hell we'll all be lucky to be alive in 2030..
The coming World Depression will also force this to happen as well.
This massive price competition will cause tuition at private colleges to drop to one-third to one-half in order to compete with public colleges. Faculty that are not laid off will be forced to double or triple their teaching load.
What isn't noted on here is that the Federal government will be too broke to allow the polulace to get stude4nt loans to pay for $50k-$130k for college, parents do not have this money, the jobs market does not support this and thus in a supply and demand market, colleges will have to bring costs down to what people are actually able to pay without the endless largess of government loans artificially propping up fake college costs.
College should cost no more than your local public high school, but the intelligencia have inserted GI Bill money and allowed student loans to rape the students with exhorbitant costs that are not justified.
Huh. So, when I go back to paid work, not only do I have to be certain I am earning a wage equal to my spouse's, we will also have to save my full salary for at least half a decade in order to afford our child's college...should our child pick the college path.
I will also be telling our child about the Skilled Trades, and, the Military, but, emphasis on Skilled Trades. Not so sure the college supported careers (other than CEO) are really worth the effort, right now.
Here's why college is a scam. I worked as an online training developer for big corporations. We train hundreds and thousands of workers online...all for the cost of a few servers, some people to manage those servers and a subject matter expert (professors in this case), and someone like myself (a team) to create the content. Once the content is built, you can deliver this online to the world. There's no need for textbooks with pdf/Word documents. There's no need to go to class. You only need a handful of professors...math, sciences, etc. You do not need 100 textbooks on Geometry. The cost of education can come way down. And for those of you who like the classroom environment? Fork over the $40,000 to attend. I guarantee you that a choice between a year of school costing $2,000 and $40,000, those would choose to stay at home and build the skill of discipline, which is missing from us Americans. Then you can have social media to help students keep in contact to discuss the material. You know why this won't work? Money. The cost of education would come down to nothing. We do not need 1,000 universities across the land. Higher education is big business. The reason why this wouldn't fly is because there would be no more need for universities. You still have the need for professors...who can hold webinars via GoToMeeting, Skype or MSNs conferencing software programs. The problem is that universities are a billion dollar business. Imagine how much education would come down by posting class materials digitally. If 50,000 students across the country were taking Art History, what would a class like that cost? Probably $20 per student when you factor in the cost of the professor and the technology folks and content design people. That’s $1 million to build an Art History class, which is WAY high. I just used that for example. That art history class can then be used for generations! And it can cover so much more than a textbook…and be interactive…you can have videos of the actual statues in Italy or England or France. If you charged $100 for that course, you would have $5 million. The profit is extraordinary at that level; however, the other 20,000 universities across the land teaching that and charging an average of $500 would say no freaking way! This is the problem, folks. Higher education is like any other big business. The other thing that pisses me off...you can only get a good education if you go to an Ivy League School. Well, you can have that "top shelf" material available to all. Ladies and gentlemen, what we have here is a big business like big tobacco doing everything it can to protect its product. There are solutions. This is the solution. So MSN, please write a story about how the cost of education can come down by proposing a national university where anyone can educate themselves. You know why this won't happen? Because if everyone becomes smart, then they won't have anyone to flip burgers. There's a vested interest by big business and government to keep us dumb...the service industry would not have workers anymore. People, please get wise to the mechanics behind what really runs this country. It will sicken you when the blinders are taken off.
Note--> This will be a very sarcastic posting....
Don't worry everyone.
As long as the wealthy, super-wealthy, and ultra-wealthy can afford college, we will be okay. So keep them tax-breaks for these people going, US govt and GOP'ers.
Why should the rest of us try to live the American dream of getting a college education and owning a home? As long as the wealthy can afford it, things will be just fine. THeyw ill spend money on things that the rest of us work to make for them. You know, the "trickle-down theory" conservatives seems to think is the greatest economic theory since the beginning of time.......
This is ridiculous, our government needs to step in and take control of these costs since these universities are acting like "skys the limit." They should be audited either by the IRS or Dept. of Education. Also, being a professor use to be a job of altruism and scholarly pursuit. Now, the pay for a professor is more reflective of elitism and let's be honest what do they really contribute to our overall success in gainful employment. They deal in theory mostly with very little practical experience to contribute. Most of them write and re-write their books and force their students to literally buy their rhetoric. I say cut their salaries, no more bragging rights off the expense of young students. Also, cut the sport scholarships back. There is no reason that the rest of the students should pick up the tab for any sports team. There's a start in reducing cost of education.
I think that it would be prudent to mention community colleges in this article. Community colleges are much cheaper alternatives. What is the prognostication for a student who might wish to go that route?
The college tuition system is a scam funded by a corrupt student loan system. Unlike other kinds of loans, there is very little consumer protection for borrowers, even bankruptcy is not allowed to get out loans. This is a problem that will be larger than the housing/banking crisis unless our leaders do something about it.
Let's shed some light on what this small Divison I school is doing in Evansville, IN, and start a wave of it across the nation. The University of Evansville is freezing tuition for the next 4 years. For students that begin in the fall of 2013, their tuition will be the same for the next 4 years. This is also the case for any students currently attending. They're calling it the "Big Freeze". It's about time some colleges and universitites step it up, and be held responsible for increases. Go UofE!!!
Just search for University of Evansville Big Freeze, to find out more!
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
RECENT ARTICLES ON COLLEGE SAVINGS
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'